Intel, looking outside, will assist Webcasters

Internet Media Services should help bypass the Web traffic jams

Already inside most home computers, Intel soon hopes to add power to most entertainment programming broadcast over the Web.

The chipmaker said Thursday it plans to spend $200 million over the next two years to create Intel Internet Media Services, a biz that it hopes will enable customers to transmit movies, radio, live concerts and corporate training vids online without the hassle of slow downloads.

Plans include the construction of two broadcasting centers to offer customers production and editing equipment. First center should open in July in Portland, Ore.; the second’s skedded for London later this year.

Avoiding traffic

Centers will be connected to a high-speed communications network that should bypass the Internet traffic jams that can interrupt the broadcast of video-based Web content.

Intel will sell its services directly to companies seeking to broadcast their material as well as to ISPs. Intel will support both Real Networks and Microsoft formats and is teaming with DoubleClick to incorporate ads into the broadcasts.

Loudeye will provide encoding services to Intel Internet Media Services’ customers. Intel will oversee hosting, distribution and management of the content once encoded.

Big base

Loudeye’s customers base includes Cisco Systems, Hewlett-Packard, Microsoft, Oracle, AtomFilms, BMG Entertainment, EMI-Capitol Music Group, Sony, Warner Bros. Online and Universal New Media — a client base that may now move on to use Intel’s new services.

Intel enters a game in which only few established players, including Akamai Technologies (which provides technology to speed the delivery of rich media content over the Web) and Yahoo! have opened up shop.

Value rising

The streaming media arena could be valued at $2.5 billion by 2004, according to a recent Internet Research Group study. Computer chips currently make up 80% of Intel’s business.

“If anything, it’s very early within the market, but we do see significant momentum building over the next two to three years both in terms of the size of the audience and the need to distribute content globally,” said McGregor Agan, director of market development for Intel’s Internet Media Services.

While only about 3 million homes currently use high-speed connections, that number should multiply rapidly in the next few years as cable and telephone companies deploy their high-speed Internet connections. A third of the nation’s homes now have Internet access.